EURJPY extends to highest level since 2008
The EURJPY extended above the high price from August 30 at 159.756 and in the process reached a new high at 159.908 going back to August 2008. That’s a 15-year high for the pair.
The problem is, the high could only reach 14 pips above the August 2023 high. That is not what traders expected. As a result, when the price started to trade back below the 159.756 level, the buyers turned to sellers, and the price has moved back down.
Looking at the hourly chart below, the momentum lower has now seen the price move back below the rising 100-hour moving average at 158.7804. The next target comes between 158.467 to 158.613. Below that is the rising 200-hour MA at 158.262 (green line on the chart below).
When a 15 year high is made and the break is only good for 15 pips before failing, it gives traders looking for a high, the opportunity to sell. That is what they have down with the move from 159.756 to the low at 158.52. Not a bad trade.
However, is there more?
For sellers, close risk will likely be the highs from last Thursday and Friday at 158.93 (those were highs from those 2 days). Stay below and the sellers can expect lower prices.
On the downside, sellers would become more confident on a break of the 200-hour moving average at 158.28. The price last week stalled the fall on Wednesday and Thursday near that moving average level. As a result, it increases the level’s importance from a technical perspective. Moving below what backstabbing traders looking toward the 38.2% retracement of the move up from the October low at 157.81.
As I often like to say, the buyers had the shot when they extended to new 15-year highs. They missed. Now it is time for the sellers to take their shot. Stay below 158.93 (maybe up to 159.00) would keep the sellers in control and have them looking for further downside momentum with targets at the 200-hour moving average and 38.2% retracement as the next key targets for the trade idea.